New São Paulo Mayor Shelves Massive Development Project

The Luz neighborhood, known for its train station, had been slated for a 45-block redevelopment plan. Credit: Tuca Vieira

Less than 30 days into his first term as mayor of São Paulo, Brazil, Fernando Haddad of the center-left Workers’ Party has made good on one of his campaign promises: To halt the Projeto Nova Luz, a downtown redevelopment project based on a legally questionable transfer of eminent domain rights to a consortium of private companies. An in-depth examination of the project is the subject of my Forefront story this week.

The city’s leading daily newspaper, O Folha de São Paulo, reports today (in Portuguese) that the plan, which has been batted around in various forms and under two successive conservative mayoral administrations since 2005, has officially been shelved (or as the Brazilian press idiom calls it, “shoved in a drawer”). The official reason was that the plan, projected to cost 4 billion Brazilian reals ($2 billion USD), is no longer financially viable after the São Paulo city government has already spent R$ 14.6 million ($7.3 million USD) on initial studies, consultations and marketing.

Haddad, however, is not giving up on public-private partnerships entirely, throwing his support behind a state government effort to stimulate affordable housing through smaller mixed-use developments, well below the scale of Nova Luz’s 50-block demolition. In the new scheme, both the state and municipal governments will kick in R$ 20,000 ($10,000 USD) each per unit, with the federal government’s Minha Casa, Minha Vida (My House, My Life) program paying for the rest of the construction, and private developers paying for the land while profiting on the ground-level retail.

Historically, Minha Casa, Minha Vida housing has been located in ill-served, peripheral parts of major Brazilian cities where developers find the cheapest land to maximize returns.

However, this new São Paulo housing initiative, for which details are still sketchy, will put out an RFP with specific geographical parameters for its first 16,000 units. None of them, according to the Folha article, will be in the downtown area that was slated to become Nova Luz.

While a complete overhaul of the neighborhood is now out of the question, Haddad did say that some ideas to emerge from the urban design plans prepared for Nova Luz, including bike lanes, could translate into actual public works in the near future.